Gold below $1,340 as threat of US airstrike on Siyria diminishes

• Gold retreats as there is no imminent threat of a US attack on Syria for now.
• Hawkish FOMC minutes on Wednesday were negative for gold.

Gold continued on Thursday its reversal down started on Wednesday after it tested January’s highs at $1,375.70. It is currently trading back below the $1,340 level at around $1,336.40 down 1.23% on the day. 

Sending gold higher on Wednesday was the imminent threat of an airstrike on Syria by the US. However, Trump, early Thursday said in a tweet that the strike was not that imminent. 

“Never said when an attack on Syria would take place. Could be very soon or not so soon at all! In any event, the United States, under my Administration, has done a great job of ridding the region of ISIS. Where is our “Thank you America?” Tweeted Trump.

The tensions in the Middle-East have been soaring since last Sunday when a suspected chemical attack took place in Syria, allegedly led by Bashar al-Assad, Syrian President. 
  
On the macroeconomic front, the FOMC minutes on Wednesday where largely hawkish and higher interest rates are generally seen as a negative for gold which is a non-yielding asset. 

“It would appear the central bank (Fed) has laid the groundwork for another rate hike in June, which would leave them six months to implement the third that is forecast and also leave room for a fourth if it’s deemed necessary by the data in the interim. That may be providing some relief for the greenback in the near-term but it’s really struggling to gather any upward momentum.” Commented Craig Erlam, a senior market analyst at Oanda.

Gold 4-hour chart

The short-term momentum is rather bearish. Resistance is seen at the $1,350 psychological figure and at $1,365.70 high made on Wednesday. Immediate support is the $1,335 level and then $1,326.60 swing low followed by $1,319.30 cyclical low.